So what's EPA up to with its CO2 regulations?

Ever since EPA announced its plan to regulate greenhouse gas emissions from “stationary sources” (power plants, factories, etc.), people have been waiting in breathless anticipation to find out how the agency will walk that political tightrope without, well, falling on its face. The choices it makes will have substantial consequences, not only for polluters, ratepayers, and the atmosphere, but for the Obama administration and the course of electoral politics.

(Yes, I hang around people who wait with breathless anticipation for EPA rulemakings. What’s it to you?)

Documents released early this week finally start to offer a glimpse into EPA thinking. Long story short: Climate hawks shouldn’t expect much from these upcoming regulations. They won’t be a substitute for the climate bill. Not even close.

Here’s the basic problem the EPA faces: The best way to reduce greenhouse gas emissions from stationary sources — primarily power plants — is to approach the situation holistically: shut down a bunch of dirty power plants, build a bunch of clean power plants, and push hard on efficiency to cover the cost differential and protect ratepayers. Legislation could have done that. EPA can’t. EPA can’t make anybody build anything.

EPA is forced by the structure of the Clean Air Act to tackle greenhouse gas emissions on a plant-by-plant basis, using what’s called a Best Available Control Technology (BACT) standard. The agency describes it as “a case-by-case decision that takes into account technical feasibility, cost, and other energy, environmental, and economic impacts.” Theoretically regulators can require anything, up to and including different combustion processes and even different fuels.

That BACT process works well enough for traditional air pollutants like sulfur dioxide or particulates, but for CO2 it’s … awkward. There’s no scrubber that will remove CO2 from smokestack gas. There are no existing means for incrementally ratcheting down CO2 emissions. Instead, the options for stationary sources tend to come in two flavors: modest and radical. There’s little in between. It puts EPA in a bind.

This is especially true when it comes to existing power plants.

(Sidebar: Power plants that were “grandfathered” under the Clean Air Act and do not have permits for conventional pollutants will not have to get a permit now for CO2. They’re still protected until they make “substantial upgrades,” per New Source Review. More on that stupid state of affairs here. All facilities that are permitted for other pollutants will, however, have to add CO2 to their permits.)

In the case of existing, conventional coal plants, the options for CO2 are either improvements in efficiency (meh), fuel switching to biomass and/or natural gas (whoa), or carbon capture and storage (double whoa). The former is fairly cheap, but has fairly marginal effects. The latter two, on the other hand, are expensive and would have the effect of forcing a huge swath of old coal plants into retirement, possibly the majority of them, which would be awesome and all, but would also call down epic political blowback.

EPA will not require the radical options. In fact, in the guidance it just released (which is meant to help state permitting authorities get their heads around CO2 permitting), it is at pains not to prescribe any particular BACT standard. Decisions are left to the case-by-case determination of state regulators. But it does hint that dramatic requirements are unlikely:

In most cases for GHGs, [the BACT] process should lead to implementing energy efficiency measures, which generally cost less than add on emission controls and can result in cost savings.

Here’s what it says about fuel switching:

BACT should also include consideration of “clean fuels” that may produce fewer emissions but does not necessarily require a different type of fuel from the one proposed, particularly when it can be shown that using another type of fuel would be inconsistent with the fundamental purpose of the facility.

Here’s what it says about CCS:

Carbon Capture and Sequestration is a promising technology in the early stage of demonstration and commercialization. While it should be identified as an available control measure in the first step of BACT for a large combustion source in these high GHG emitting sectors (Fossil-Fuel Fired Power Plants, Cement Production, And Iron And Steel Manufacturing), it is currently an expensive technology and unlikely to be selected as BACT in most cases.

So, existing facilities that have to get a CO2 permit will probably face modest efficiency improvements at most. That’s not nothing, but it won’t lead to a substantial reduction in GHGs.

The news is slightly better for permitting of new coal plants. Along with its guidance, the EPA released technical white papers covering GHG reduction options for each kind of facility. Naturally I geeked out on the one on power plants [PDF]. It discusses several options for new plants. On the far end — the most CO2 reduction, the most expense — is CCS, but as mentioned above, EPA is unlikely to require that any time soon.

The next option down the spectrum is to require that new coal plants be built with the most modern, efficient technology. For instance, for a new pulverized coal plant, EPA could require a supercritical or ultra-supercritical plant, which burns the coal at much higher temperature and pressure and thereby gets more power out of each unit of fuel. The other option here is integrated gasification combined cycle (IGCC) plants, which convert coal to a cleaner gas before burning it. IGCC plants are the most suitable for adding CCS later, since there’s much less post-combustion CO2 to separate out relative to pulverized coal.

Ultra-supercritical and IGCC plants are considerably more expensive than traditional plants, but not so much so that EPA requiring them would be out of the realm of possibility. There’s certainly a solid case to be made that those technologies are BACT for new coal plants.

A third option for new plants, the one I’m most excited about, is requiring that they be cogeneration plants — i.e., that they produce both electricity and heat. This is an extremely attractive option because it substantially increases the efficiency of the plant, in a way no other technology can. As EPA notes, “Coal-fired [plants] dedicated to electric power generation and using the latest commercially available advanced technologies will generally operate at overall net efficiencies of approximately 40%.” That’s the best a free-standing plant can get, even an IGCC plant. It’s way better than old-school coal plants, but still, wasting more than half the net energy input ain’t great. A cogeneration plant captures the heat that otherwise gets vented off into the atmosphere and puts it to use. It can push the net efficiency of a coal plant — the useful energy it gets per unit of fuel — up to the 60-70 percent range.

The thing with cogeneration plants is that they have to be located close to demand. Electricity can be carried long distances but heat can’t. It has to be used nearby. If EPA started driving demand for cogen plants through GHG regulations, you’d see a lot more small or mid-sized plants, closer to towns and cities, using fuel more efficiently and losing less energy to transmission. That would be a good thing.

To sum up (
in the unlikely event anyone’s still reading), the net effect of EPA regulations on stationary-source greenhouse gases is likely to be modest. Old plants will get some efficiency tweaks and new plants will have to be built with modern technology. This will bring the U.S. in line with China, which is building tons of hyper-efficient new coal plants, retiring a bunch of inefficient old ones, and increasing the net efficiency of its coal fleet by leaps and bounds. But China isn’t reducing its net emissions, and these EPA regulations are unlikely to reduce net emissions either.

This is not to say, of course, that climate hawks can afford to let their guard down in the face of the nasty, sustained attacks on EPA that are already starting. For one thing, this isn’t just about CO2 regulations — other upcoming EPA regs are likely to have as much or more impact on the coal fleet, and conservatives are going after them too. For the next two years, fine policy disagreements with EPA are going to have to take a back seat to all-or-nothing warfare. Skreee!

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